The Current Spot Rate Is BP 0

question 31

Multiple Choice

The current spot rate is BP 0.5024/$US.The 3-month forward rate is BP 0.5040/$US.The TE Company expects a payment of BP 100 million in three months.If the firm hedges this transaction in the forward market,what is the $US amount it will receive in three months?

• A)$US198.41 million
• B)$US199.04 million
• C)$US 50.40 million
• D)$US 50.24 million

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Definitions:

Prostaglandins

A group of lipid compounds that have diverse hormone-like effects, including regulating inflammation, blood flow, and the formation of blood clots.

Dysmenorrhea

Painful menstruation that affects the quality of life, often accompanied by other symptoms like nausea and headaches.

Analgesic

A drug or substance that is used to reduce pain without causing loss of consciousness.

High-Risk Behaviors

Actions that significantly increase the likelihood of causing harm or adverse consequences to oneself or others, often associated with health and safety.